27.05.2025

Slow and steady wins: A realistic approach to building wealth

Amidst viral gurus and AI scams, real wealth isn't built overnight. Learn why compound interest, long-term thinking, and defensive investing are the true keys to financial success.

Words: Dr. Lee Chee Loong, Senior Lecturer at Taylor’s University.

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Disclaimer: This article is for educational purposes only and should not be considered financial advice.


In the age of social media, self-proclaimed " investment gurus" are everywhere, often accompanied by eye-catching profit screenshots and bold claims of life-changing returns, leaving their followers spellbound. Even more alarming is the use of AI technology to mimic well-known investment influencers, luring followers into so-called "investment groups".

Unfortunately, some of these promises tend to lead to significant financial loss.

What appears to be free advice often has hidden cost. It’s crucial to approach such content with a healthy dose of skepticism. The goal of many of these so-called gurus is not to teach you how to make money, but to earn profit, sometimes at the expense of their audience. Countless individuals have suffered significant losses – including everyday individuals and even professionals. The question that comes to mind is - why do people so fervently believe in these gurus and fall into such traps?

They mistakenly believe that investment is a form of magic—that finding the right guru will lead to overnight riches and a life of financial security. This mindset unfortunately is not only misguided, but it can be dangerous.

It’s important to firstly note that the essence of investment is wealth preservation. Investment won’t make you a millionaire overnight, but it can help you combat inflation and protect the fruits of your labour. According to the Rule of 72, if you don’t invest, with an inflation rate of 5%, your wealth will halve in less than 15 years. Investment is essential, but promises such as double returns or ‘get rick quick’ schemes should raise red flags.

Photo credit: The People's Federal Credit Union

 

The true power of investment lies in compound interest — the process of earning returns on your returns. Warren Buffett became the world’s most successful investor not because he possessed some mysterious skill, but because he understood and harnessed the power of compounding. He started investing at a young age and consistently held high-quality assets over the long term. Even with seemingly modest annual returns, decades of accumulation grew his wealth to staggering levels. However, Buffett’s wealth didn’t truly take shape until he was 65. His methods are public and straightforward, yet many refuse to follow them because they cannot accept the idea of growing rich steadily. The core of compound interest lies in time, not in short-term high returns. Just like personal growth or building a career, wealth-building is a gradual process. There are no shortcuts—only sound decisions repeated over time.

To avoid falling victim to false promises, the first step is a shift in mindset: investment is not about offense, it’s about defense. Its primary goal is not to chase exorbitant profits, but to protect your wealth from the erosion of inflation and uncertainty. Many equate investment with "stock trading" or "speculation," which is a misunderstanding. True investment should prioritise stability, focusing on asset allocation and risk management.

Last year, Malaysia’s official inflation rate was expected to average between 2% and 3.5%[1]. To stay conservative, we doubled this figure, setting a target return of 5% to 7%. Achieving or slightly exceeding this target is sufficient, as higher returns often come with higher risks. When investment is viewed as a form of self-defense, it becomes possible to navigate the complexities of financial markets successfully.

If you’re willing, investment can become your financial self-defense. Rather than chasing hype or following every trend, focus on building your own understanding. Your perspective shapes your actions, and your actions determine your destiny. Some people hustle tirelessly yet end up with nothing, while others observe calmly and reap the rewards. May we all choose the latter—investing wisely, thinking critically, and protecting the wealth we’ve worked so hard to earn.

[1] https://www.thestar.com.my/business/business-news/2024/03/20/headline-inflation-to-average-between-2-and-35-in-2024

About the Contributor

Dr. Lee Chee Loong

Dr. Lee Chee Loong is a member of the Active Ageing Impact Lab and a Senior Lecturer at Taylor’s University. He is also a Shariah-Registered Financial Planner (M30018147).

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